Mills to have enough sugar to meet export obligation

Sugar mills could export up to one million tonnes of the sweetener in the 2010-11 crop year, starting October, to fulfill their export obligation, as the country’s production is expected to outstrip demand, an industry body said.

“We will have enough sugar to fulfil the export obligation under the Advance Licence Scheme (ALS) in the 2010-11 crop year,” Indian Sugar Mills Association (Isma) Chairman (Policy Advisory Group) Gautam Goel said.

It is unlikely that country would have enough sugar to undertake regular exports beyond this obligation, he added.

Under ALS, mills had imported 2.075 million tonnes of raw sugar at zero duty in the 2004-05 crop year, as there was a shortfall in production then. Out of the total quantity of imported sugar, an export obligation of 967,000 tonnes still remains. The deadline for export of this quantity of refined sugar is March, 2011.

Goel said: “Export obligation can be fulfilled as about 29.5 million tonnes of sugar (including an expected production of 25 million tonnes and carry-over stock of 4.5 million tonnes) is likely to be available in the next crop year, against the annual demand of 23 million tonnes.”

Even though mills situated in southern India are demanding that they should be allowed to fulfil their export obligation now, the government is not permitting them to ship the sweetener till Diwali in November, fearing a price rise during the festive season.

According to the Isma, sugar production in the ensuing 2010-11 crop year is pegged at 25 million tonnes against 19 million tonnes in the 2009-10 crop year.

According to the data released by the Agriculture Ministry, there has been an increase of 13.3 per cent in acreage under sugarcane cultivation, at 4.74 million hectares as on July 2, compared to 4.18 million hectares on the same date last year.

Sugar mill gate prices softened by upto Rs 10 a quintal in the national capital today on ample supply amid reduced offtake. However, sugar spot prices ended around overnight levels on little doings. Marketmen said increased arrivals from mills along with reduced offtake by stockists, mainly pulled down mills sugar prices. In mill gate section, sugar mawana and dorala dropped by Rs 10 each to Rs 2,670 and Rs 2,650 a quintal.